Fiscal Imperative: Credit-Card Moderation

The Keene Sentinel has published this guest column by Tyler Sweeney, the New Hampshire state director for The Concord Coalition.

Many milestones mark the path to adulthood: casting a vote, moving out of your parents’ home, buying your first car, having your first legal drink and finally getting your own Netflix account.

One other milestone deserves emphasis: receiving your first credit card. That little plastic rectangle often comes with words of caution concerning the pros and cons of its use.

My mother gave us a stern-faced warning that boiled down to this: Live within your means. She emphasized that, in a crisis, you could borrow just enough to get by but should pay it off as quickly as possible, preferably before large interest costs begin to accrue.

That was wise advice because debt can build up fast and even threaten to become unsustainable.

Just ask the federal government.

In fiscal 2018, which ended Sept. 30, the government borrowed $779 billion to pay its bills. That was up from $666 billion the previous fiscal year, and the deficit is on its way to more than $1 trillion as early as fiscal 2020, according to the Congressional Budget Office.

Congress has swiped its credit card 46 out of the past 50 years to finance the government as spending outpaced tax revenue, even in periods of economic growth. Without broad fiscal reforms, the federal debt — now a jaw-dropping $21.8 trillion — is projected to continue growing on an unsustainable path.

Many parallels can be seen between personal borrowing and our nation’s fiscal policies. Frankly, elected leaders seem to set aside or forget altogether those basic credit-card lessons as soon as they arrive in Washington.

I still heed that early credit-card lecture and apply it to my work.

As with personal finances, it is not necessarily bad for the federal government to have some debt and an occasional annual deficit under certain circumstances.

However, we now have a national debt that is at its highest point relative to the size of the economy since the World War II era and rising. Projections indicate the government will soon spend more in interest on that debt than we will put into the entire defense budget.

Used correctly, debt can get you out of a jam, like a car breakdown, or the nation out of an economic crisis. Used incorrectly, it can become a major liability in personal budgets or, at the national level, it can put a drag on the economy, hinder the nation’s ability to invest in the future and leave an undeserved financial burden to future generations.

In addition, most economists agree this is the wrong time for the federal government to be sinking further into debt, with historically low unemployment and strong economic growth.

Of course, there is not a perfect analogy between personal and governmental debt. The federal government can continue to borrow massive amounts of money for as long as individuals and foreign countries continue to see U.S. Treasury debt as one of the safest possible investments.

In the midterm elections, unfortunately, most candidates barely mentioned the national debt. Now members of the lame-duck Congress are considering tax and spending measures that would mean still more borrowing.

It is time for elected leaders to be reminded that the misuse of the nation’s credit card has put the federal debt on a dangerous and unsustainable path.

New Hampshire voters are exceptionally engaged in public affairs, and the state receives special attention during each presidential election cycle.

So, my call to action to my fellow New Hampshire residents is this: Tell elected leaders in Washington that they must put the federal budget on a more responsible and sustainable course.

Equally important will be bringing this message into 2020, when a new crop of presidential candidates comes to New Hampshire looking for a path to victory. Get out and force that path to require fiscal responsibility.